Hematopoietic stem cells (HSCs) are formed during embryogenesis by a complex process that is largely conserved across vertebrate phylogeny. The zebrafish mutant kugelig (kgg) has a severe defect in hematopoiesis, as well as altered anterior-posterior patterning and abnormal hox gene expression. The mutant kgg phenotype is caused by a deletion in the cdx4 gene, known to regulate hox gene expression in early development, including hoxb4 and other genes that activate early HSCs. Microarray analysis of kgg mutants compared to wildtype (WT) revealed an upregulation of raldh2, the final enzymatic step for retinoic acid (RA) production. RA exposure decreases blood cells in zebrafish embryos, while a chemical that blocks activity of raldh2 restores blood formation in kgg mutants. To examine the hypothesis that cdx4 affects blood formation by altering RA signaling, Specific Aim 1 proposes to characterize the RA signaling pathway in the zebrafish cdx4 mutant by studying retinoic acid receptor expression and function, and RA inhibitors. To test whether the loss of cdx4 is a cell autonomous defect in the formation of HSCs, labeled WT HSCs will be transplanted into cdx4 mutant embryos. Transplanted cells will be monitored for homing to known sites of definitive hematopoiesis and production of circulating differentiated blood cells. In Specific Aim 2, we propose a chemical genetic screen to test the hypothesis that other molecules can rescue or bypass the requirement of cdx4 for blood formation in vivo. Heterozygous kgg fish will be mated, and their embryos, both mutant and WT, will be incubated with individual or pooled chemicals. When the chemicals are washed out, embryos will be scored for increased blood formation by staining of hemoglobin with o-dianisidine. "Positive hit" chemicals will be tested for dose-response effects, as well as alteration of transcription factors known to regulate hematopoiesis. Chemicals will then be tested on mouse ES cells and yolk sac blood island cultures to examine expansion of multipotent progenitor (CFU-GEMM) colonies. Characterization of signaling pathways affected by the "positive hit" chemicals will increase the understanding of transcription factors that control these early progenitors. The screen should identify chemicals that expand erythroid progenitor cells or multipotent HSCs, which could have a monumental impact on human diseases involving paucity of blood cells, such as certain anemias, bone marrow failure syndromes, and diseases requiring HSC transplantation.